As the share of the United Kingdom’s aid spent through commercial contracts continues to grow, many international NGOs are making the switch from traditional grants to contracts.
The competition is stiff, as for-profit giants such as Adam Smith International, PricewaterhouseCoopers, KPMG and others flex decades’ worth of experience, vast overheads and, in some cases, entire departments designed around Department for International Development contracting. International NGOs are also often intimidated by DFID’s value for money indicators, and worry they won’t have the risk appetite to stomach its payment-by-results approach, in which the delivery partner is paid for its work only after the results are delivered.
Still, for many international NGOs, the benefits outweigh the risks. Organizations new to DFID are also in some cases finding subcontracting a viable way into the DFID market, as nonprofit colleagues such as the International Rescue Committee begin to offer opportunities for smaller or less-experienced organizations to join consortia.